Census snapshot: One million homes left empty across Australia

Australia has 200,000 more homes sitting empty than it had a decade ago, new figures show, despite the country grappling with a housing supply shortage that is pushing the cost of a first home beyond many of its residents.

The figures from the 2016 census have been described as "cruel and immoral" by leading UNSW urban policy expert Hal Pawson, who has warned the government must act to stem the growth in unoccupied housing.

"There is gross under-occupation across Australia," Mr Pawson said, adding that there were up to a million homes with three or more extra bedrooms than the owner required.

Figures from the Australian Bureau of Statistics show up to 11.2 per cent of properties are unoccupied. Photo: Glenn Hunt

"There is a growing realisation that our housing market is not working well. It doesn't just create a problem for people on low incomes, it also hurts spending in the economy when housing is overvalued."

The figures from the Australian Bureau of Statistics show up to 11.2 per cent of properties are now unoccupied, up from 9.8 per cent in 2006.

In the space of two decades Australia has added 2.1 million homes to its property portfolio but an extra 360,000 are being left vacant.

Separate analysis by the Grattan Institute, released on Monday, found the number of Australian home owners has been falling for three decades, with the spike in home ownership restricted to baby boomers.

"Falling home ownership rates for younger Australians, especially 25 to 34-year-olds where home ownership rates are down 6 per cent in the last decade alone, are just the latest evidence that the traditional Australian dream is slipping out of their reach," said Grattan Institute fellow Brendan Coates.

Mr Coates found home ownership was also down by 7 per cent over the past decade for 35 to 44-year-olds.

House prices have risen rapidly over the past decade. They're up 70 per cent in Sydney alone over the past five years, so those that didn't (or couldn't) afford to buy over the past decade by their mid-30s are unlikely to purchase a home now," he said.

More than 400 people were sleeping rough in Sydney on census night in 2016. Photo: Wolter Peeters

On Monday, shadow treasurer Chris Bowen said the uneven playing field created by negative gearing and capital gains tax was "threatening to leave generations of permanent renters".

Mr Pawson said the high levels of vacant housing was only compounding the problem, with unused houses driving down supply in both the rental and mortgage markets.

"The census showed empty property numbers up by 19 per cent in Melbourne and 15 per cent in Sydney over the past five years alone," he said.

"Considering that thousands of people sleep rough – almost 7000 on census night in 2011, more than 400 per night in Sydney in 2017 and that hundreds of thousands face overcrowded homes or unaffordable rents – these seem like cruel and immoral revelations."

Treasurer Scott Morrison introduced measures in the May budget to hit foreign buyers with thousands of dollars in fees for leaving their investment property vacant, while also encouraging older Australians to downsize by allowing people aged over 65 to contribute $300,000 from the sale of their homes into their tax-free superannuation.

Mr Pawson urged the government to go further by helping the states replace stamp duty with land tax, removing the up-front cost of stamp duty as a disincentive for home owners to downsize.

A Greens policy proposal costed by the Parliamentary Budget Office in March found such a move would save home buyers up to $40,000 in Sydney and $55,000 in Melbourne, while delivering billions of dollars to fund schools and hospitals and encouraging older Australians into smaller homes.